MGKT Chapter 8
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A Market Is...
- people or organizations with
- needs or wants, and with
- the ability and
- the willingness to buy.
- A group of people that lacks any one of these characteristics is not a market.
People or organizations with needs or wants and the ability and willingness to buy.
A subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs.
The process of dividing a market into meaningful, relatively similar, identifiable segments or groups.
The Importance of Market Segmentation
- Markets have a variety of product needs and preferences
- Marketers can better define customer needs
- Decision makers can define objectives and allocate resources more accurately
Segment must be large enough to warrant a special marketing mix.
Identifiability and Measurability
Segments must be identifiable and their size measurable.
Members of targeted segments must be reachable with marketing mix.
Unless segment responds to a marketing mix differently, no separate treatment is needed.
Bases for Segmentation
- Benefits Sought
- Usage Rate
- Region of the country or world
- Market size
- Market density
Benefits of Regional Segmentation
- New ways to generate sales in sluggish and competitive markets
- Scanner data allow assessment of best selling brands in region
- Regional brands appeal to local preferences
- Quicker reaction to competition
- Ethnic background
- Family life cycle
Market segmentation on the basis of personality, motives, lifestyles, and geodemographics.
Bases for Psychographic Segmentation
- Segmenting potential customers into neighborhood lifestyle categories.
- Combines geographic, demographic, and lifestyle segmentation.
The process of grouping customers into market segments according to the benefits they seek from the product.
Dividing a market by the amount of product bought or consumed.
A principle holding that 20 percent of all customers generate 80 percent of the demand.
Bases for Segmenting Business Markets
Business customers who place an order with the first familiar supplier to satisfy product and delivery requirements.
Business customers who consider numerous suppliers, both familiar and unfamiliar, solicit bids, and study all proposals carefully before selecting one.
- Demographic characteristics
- Decision style
- Tolerance for risk
- Confidence level
- Job responsibilities
A group of people or organizations for which an organization designs, implements, and maintains a marketing mix intended to meet the needs of that group, resulting in mutually satisfying exchanges.
Undifferentiated Targeting Strategy
A marketing approach that views the market as one big market with no individual segments and thus requires a single marketing mix.
Concentrated Targeting Strategy
A strategy used to select one segment of a market for targeting marketing efforts.
Multisegment Targeting Strategy
A strategy that chooses two or more well-defined market segments and develops a distinct marketing mix for each.
Developing a specific marketing mix to influence potential customers’ overall perception of a brand, product line, or organization in general.
- 1.Assess the positions occupied by competing products
- 2.Determine the dimensions underlying these positions
- 3.Choose a market position where marketing efforts will have the greatest impact
- A positioning strategy that some firms use to distinguish their products from those of competitors.
- Distinctions can be real or perceived
A means of displaying or graphing, in two or more dimensions, the location of products, brands, or groups of products in customers’ minds.
- Price and Quality
- Use or Application
- Product User
- Product Class
- Changing consumers’ perceptions of a brand in relation
- to competing brands.
Family Life Cycle (FLC)
a series of stages determiend by a combination of age, marital status, and the presence of absence of children
an individualized marketing method that utilizes customer information to build long-term personalized, and profitable relationships with each customer
the place a product, brand, or group of products occupies in costumers' minds relative to competing offerings
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